Frugality Magazine - Frugal Living Tips for Financial Freedom

Debt Free? 3 Reasons Why You Should Still Live Frugally

I remember when I finally bit the bullet and started to make serious inroads into paying off my debt.

The first few months were tough, having to tell myself not to spend money on things I wanted.

It took considerable self-discipline and I don’t mind admitting that I fell off the band-wagon several times in those early days as I adopted my new spend-thrift habits.

In those early days I would fantasize about a debt-free life. I would imagine all the fun I could have with the money I putting towards debt. I would plan all the things I could do and the places I could go. It was heady stuff.

Somehow, paying off debt didn’t seem so bad if I kept reminding myself that it was only a temporary state of affairs, and that soon enough I’d be clear of the debt and free to start living a much higher quality of life.

However as I continued on, watching my debt getting lower each month, a funny thing started to happen. I got used to living on a budget. It stopped become a challenge and simply became “normal”. Instead of feeling jealous when I saw people buying nice stuff, instead I felt sorry for them, and how much money they were needlessly and unknowingly wasting.

I subscribed to personal finance blogs and I read investment books; I “invested” time rather than money while paying off debt into finding a route to financial freedom. A destination where I would never again have to live like this.

Then, one day, my debt was gone.

What a feeling of relief. Finally, I could relax my budget. Except by now I didn’t want to.

The truth is that if you’ve lived with debt for years (as many of us have) then the day you finally become debt-free is like being re-born. Suddenly all those possibilities and options become a reality rather than a fantasy.

At this point it is very tempting to totally relax your budget and just start spending money on whatever you want just like everyone else. However there are a number of reasons why this might be a major financial mistake…

Avoid Old Habits

Let’s be honest; if you’ve been paying off debt then it’s important to accept that you got yourself there. Your own reckless spending is responsible, however much we hate to admit it. What’s to say, now that you’re debt-free, that you couldn’t find yourself back there very soon indeed?

Once you’ve managed to develop a frugal lifestyle, therefore, doesn’t it make sense to keep that for as long as possible? In this way you can further flex your “financial muscles” and keep on training yourself to make smart purchasing decisions.

Continuing to live frugally after becoming debt-free is therefore a great way to maintain your budget and ensure financial stability in the future.

Build A Nestegg

The reality is that if you continue to live frugally after you become debt-free then you’re going to have a fair amount of “spare money” each month. Rather than spending this money on vacations and posh coffees, why not make the most of it, and start saving this money?

Trust me – it’s a lot easier to put money away in a savings account or investment account if you’re used to living on a budget. Transferring that money simply becomes second nature; and over time you’ll have the pleasure of seeing your account balance grow rather than shrink.

Whether that money represents a deposit on a house, an investment fund or just something for a rainy day, when you’re comfortable and experienced in economizing in order to save money, it makes sense to continue using this skill to improve your financial future.

Finally Get Ahead

The money you manage to accrue in your savings doesn’t necessarily have to sit there for ever more. You could use some of it to buy profit-producing assets like rental property or a business.

In this way you’ll be able to gradually increase your income over time and become ever stronger from a financial perspective. Each time you invest money, your income goes up, which gives you more to invest and so on.

Over time that wealth grows, and with it the freedom you feel. If you’re lucky, you’ll be able to afford to retire early based on this simple process. Rich people, as they say, buy assets. Poor people buy liabilities. Once you figure out the difference your life can start to look very different.

How long did it take you to become debt free? How did it feel to finally send off that last payment? Please leave your thoughts in the comments section below…

Even without debt you should still live a frugal lifestyle. Here's the secret bout getting ahead financially...

Richard

Sun-worshipper and obsessive frugality blogger. For loads more money-saving advice come and join us on Facebook.

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